Why Some Businesses Fail (part I) - Business - Nairaland
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| Why Some Businesses Fail (part I) by Dollarchap(m): 2:22pm On Oct 12, 2012 |
No one ever plans to fail in any endeavour. When you are going into a business, you will never wish yourself failure. In fact, all your loved ones will wish you success. But with all these wishes, a lot of businesses still fail. The rate of business failure can be drastically reduced if adequate attention is paid to knowing the reasons businesses fail. It is when you are able to address the question ‘why’ that you can know ‘how’ to prevent your business from failing. In these series, we shall be addressing the reasons for business failure one after the other. Kindly note that these reasons are not, in any way, addressed in the order of their impact on businesses. Reason one: Lack of adequate planning There is a saying that he who fails to plan has already planned to fail. Failure to plan is a sure way to failure. Skills, expertise or years of experience can never be a substitute for planning. Many people believe that capital is their problem but this is not always the case. Give such people capital, within few months or years, their businesses will crumble. Sourcing for capital is one thing; the right application of such is a different thing entirely. Many small businesses fail because of fundamental shortcomings in their business planning. It must be realistic and based on accurate, current information and educated projections for the future. Your plan should include among others the following: •The description of your business, vision, mission, goals and objectives. •Critical success factors. For example, the choice of location may be critical to your company. No matter your level of investment, if you choose a wrong location for a business that requires a particular type of location, the investment will go down the drain. •Requirements such as capital, work force, assets, regulatory laws etc. •Likely problems and possible solutions. A lot of entrepreneurs miss it in this area. They never envisage any problem. They believe that everything will just go on smoothly. So, at any slight problem or challenge, they are not able handle it. •Analysis of competition. There are other people that are doing or will do what you are doing. How do you want to distinguish your products or services? What will make people to prefer you to competitors? •Marketing and promotional activities This is just to provide a guide on what planning entails. Your planning should not be restricted to the points mentioned above. The best way to ensure adequate planning is to come up with your business plan. Some people mistakenly believe that business plan is just a mere document but statistics shows that greater percent of businesses that succeed have their well prepared business plan. So, planning is very crucial. If you need to plan before embarking on a trip, how much more when you are going into a business? Therefore, the message is plan, plan and plan! This is Part 1, the part 2 can be found in the link below: http://www.facebook.com/Otnconsulting |
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